By learning about informants’ experiences and perceptions, qualitative research provides in-depth explanations to understand aspects of social and cultural phenomena that are not possible using quantitative methods (Myers 1997; Ritchie and Lewis 2003; Neves, Gustavo and Bordonal 2013; Bitsch 2005). As stated by Bitsch and Yakura (2007, p.9) “The use of qualitative case studies has been advocated to increase methodological pluralism in agribusiness and agricultural economics research”. Additionally, through qualitative methods it is possible to answer explanatory questions about the “how” or “why” of specific issues or events, which have to deal with operational links over the time (Yin 2003). A case study is defined by Stake (1995) as an in-depth investigation that interprets the analysis of a unit such as an individual, group, organization or phenomenon. Since it also allows the capture of in-depth knowledge about subjective psychic distance at the individual level (Ojala 2015), the qualitative case study approach is considered appropriate to answer the research questions addressed in this study.
Fruit export companies in Chile are selected as the case under research in this study for two reasons: first, due to an ambitious agricultural policy based on export strategies in the past decades, the agricultural sector of this country has immensely contributed to its economic
71 development (Otter et al. 2014; Engler et al. 2012; Otter and Theuvsen 2014). This especially holds true for the fruit sector, which accounts for 50% of the country’s total agricultural exports (Klerkx et al. 2012). Additionally, Chile is one of the most open economies worldwide with 26 free trade agreements in 64 markets (DIRECON 2018). As a result, this country is nowadays considered one of the most stable and prosperous countries in Latin America (Bianchi and Wickramasekera 2016), representing a prime example of other Latin American countries such as Brazil and Argentina which have followed a similar path. And second, despite the highly perishable nature of the fruits and considering that Chile is geographically distant from most of the main fruit markets of the world, this country is the largest grape exporter in the world, the second largest of blueberries and cherries, and the most important fruit exporter of the Southern Hemisphere (ODEPA 2017). To avoid possible cross-industry variances, this study is focused in the Chilean fruit sector as single industry case.
To obtain the data, 30 in-depth semi-structured with close and open-ended interviews were conducted with managers and/or owners of export firms in Chile of different sizes who were responsible for final decision-making concerning market selection, as suggested by previous studies (Dow and Karunaratna 2006; Hutzschenreuter et al. 2016; Nebus and Chai 2014).
This kind of interviews allows the acquisition of more detailed information by allowing the interviewee to express their perspective more freely (Neves et al. 2013; Sonntag et al. 2016).
The questions and definitions of the CAGE distance dimensions were based on previous psychic distance literature (especially Azar and Drogendijk 2016; Berry et al. 2010; Dow 2000; Ghemawat 2001; Hutzschenreuter et al. 2014; Ojala 2015; Sousa and Bradley 2006).
According to Child et al. (2009), SMEs are supposed to be more affected by psychic distance than large firms. To draw conclusions on size differences, the sample of 30 interviews included ten small companies, ten medium-sized companies, and ten large companies23. One
23 To classify firms according to the size, we follow expert criteria (Yuri 2016) and categorize them according to their export volume measured as the average number of boxes of fruit exported per year over the period between 2009-2015. Thus, a firm is classified as large when it exports on average more than 800 thousand boxes per year, as medium size when it exports on average between 800 thousand and 250 thousand boxes per year, and as small firm when it exports on average less than 250 thousand boxes per year. To obtain the averages of exports, we excluded the year with the lowest quantities to avoid biased averages caused by an abnormal year, which are related to bad climatic conditions.
72 of the sample selection criteria is that firms must have reported uninterrupted exports over the seven-year time period from 2009 till 2015, to ensure that none of the firms act only as a sporadic exporter. As a second selection criterion, firms must have been located in the Valparaíso, Metropolitana, Bernardo O’Higgins, and Maule regions, where most of traditional and non-traditional fruit is produced primarily due to ideal soil and weather conditions (Fleming and Abler 2013). See map of Chile’s regions in Figure 4. In this area, largely temperate fruits are grown (e.g. apples, pears, plums, apricots, peaches, cherries, grapes, kiwifruit, blueberries, among others). The 30 companies were selected from a sample of 233 fruit export firms which fulfilled the above requirements. The corresponding information was obtained from the database Eximfruit (2009-2015). As with most qualitative case studies, the companies were purposefully selected to include information rich cases in the research (Bitsch 2005). Thus, we selected firms with different geographic diversification and internationalization strategies to avoid including only firms highly concentrated in specific geographic markets.
Figure 4. Regions of Chile
Source: (Rulamahue 2018)
73 All interviews were conducted in person and in Spanish by the same interviewer between September and December 2016 in Chile. To avoid a possible error source, this study employs single key informants (Sousa and Bradley 2006). The interviews were tape-recorded and transcribed, and last between 30 minutes and one hour and a half. For confidentiality reasons, the identities of the informants and the companies’ names are not disclosed. The transcriptions were coded and analyzed using the software ATLAS-ti. The process of codification consists of organizing data in a systematic order, classifying and creating categories that permit a comparative analysis of the interviewees’ responses within and between interviews (Saldaña 2013; Bitsch and Yakura 2007). This process allows data to be separated, gathered, collected, recollected and relinked with the purpose of concentrate meaning and explanation (Grbich 2007). The coding process was based on a deductive pre-coding of the interviewees responses into main categories according to the four CAGE distances, and then establish subcategories to compare the comments within the categories (Sonntag et al. 2016; Saldaña 2013). The coding process is “iterative” (Bitsch and Yakura 2007, p.10) or “cyclical” (Saldaña 2013, p.8); thus, the interviews and codes were reviewed and recoded several times before achieving the final results.
Table 10 presents key characteristics of the sample (for individual information of each firm see Table A2 in the appendix). The number of fulltime employees ranged from one24 to 1,100 with an average of 95, while the number of temporary employees ranged from one to 2,700 with an average of 362 employees. This wide difference stems from differences in governance structures in the supply chain. Those export firms that are vertically integrated and also comprise the production stage (which is highly labor demanding) have a higher number of employees in comparison to those that are only involved in the commercialization of the fruits. At the time of the survey, there are 9 firms in the sample that are not vertically integrated, so they do not possess orchards. The remaining 21 firms are vertically integrated, where on average they owned 66.05% of the orchards, and the remaining 33.95% is owned by suppliers. The firms’ age ranges between seven and 63 years with a mean of 23 years, and the firms’ export experience ranges from seven to 56 years with a mean of 19 years. In total 17 firms export from the moment of their foundation. Over the period under analysis
24 Corresponds to two unipersonal or individual firms.
74 (2009-2015) the firms exported on average 1,141,414 boxes of fruit with 20,917 boxes being the lowest quantity and 9,269,33 boxes the highest. These quantities show the wide spectrum of export capacity of the firms. The companies are highly export-oriented with an average of 81.33% of the total sales destined to foreign markets and only eight firms with exports under that average. Regarding the level of geographical and product diversification, the firms surveyed exported on average four different fruit varieties to thirteen countries and four geographic regions (mainly North America, Europe and Far East & South Pacific).
Additionally, 24 firms are family businesses and the remaining six are open capital firms, from which only two were subsidiaries of a foreign firm.
Table 10. Characteristics of the firms
Characteristic Mean Minimum Maximum
Number of fulltime employees 95 1 1,100
Number of temporary employees a 362 1 2,700
Share of fruit plantations owned by firms (%) b 66.05 6.00 100
Age (years) 23 7 63
Export experience (years) 19 7 56
Annual exports (boxes of fruit) 1,141,414 20,917 9,269,333
Share of total sales exported (%) 81.33 40 100
Number of fruit varieties exported 4 1 12
Number of export countries 13 2 43
Number of export geographic regions 4 1 6
Notes:a Only firms with temporary employees were considered.
b Only firms that are vertically integrated were considered.